First off: No, please don’t use this as your sole retirement strategy. 🙂
The risks involved in relying on a single source of income for retirement planning are far too high to recommend this as a viable solution.
Therefore, treat the following article purely as a thought exercise and, at best, use it as an augmentation to your well-diversified retirement strategy, which should keep you safe and secure in a multitude of adversarial scenarios.
Now that that’s out of the way, let’s take an actual look at how such a strategy would fare.
Please note, for the sake of simplicity, we assume that the USD value of the cryptocurrencies involved remains constant (unlikely!), that no one else is staking or unstaking (thereby changing the dynamically calculated APR), and that our turnover of the asset involved remains constant.
Given these volatile and dynamic parameters, the following calculation should be taken for what it is – a thought exercise based on a snapshot of data available at the time of writing this article.
The Staking Scenario
BitcoinVN’s staking vault currently offers attractive Annual Percentage Rates (APRs) for a variety of cryptocurrencies.
The funds allocated to these staking vaults are utilized by the exchange to provide liquidity for swapping transactions on the platform. In return, the staking vault participants (“liquidity providers”) earn a cut from each exchange involving the underlying asset.
Based on our analysis, a $10,000 investment spread equally across ten different cryptocurrencies could potentially yield a monthly return of approximately $167.67.
Living Costs in Vietnam
Vietnam is known for its relatively low cost of living, especially compared to Western countries.
In smaller cities or rural areas, a budget of $500-$700 per month could cover basic living expenses for a single person. In larger cities like Ho Chi Minh City or Hanoi, a more comfortable lifestyle might require $1,000-$1,500 per month.
The numbers in detail
Example calculation for a total investment of 10,000$ into the BitcoinVN staking vault program, assuming a $1,000 investment in each.
To get the monthly return, we’ll divide the new APR by 12.
- TON: New APR: 50.57% Monthly return: (50.57% / 12) * $1,000 = $42.14
- MATIC: New APR: 29.84% Monthly return: (29.84% / 12) * $1,000 = $24.87
- SOL: New APR: 38.31% Monthly return: (38.31% / 12) * $1,000 = $31.93
- DAI: New APR: 18.22% Monthly return: (18.22% / 12) * $1,000 = $15.18
- TRX: New APR: 19.90% Monthly return: (19.90% / 12) * $1,000 = $16.58
- XLM: New APR: 10.76% Monthly return: (10.76% / 12) * $1,000 = $8.97
- XMR: New APR: 18.91% Monthly return: (18.91% / 12) * $1,000 = $15.76
- BCH: New APR: 8.56% Monthly return: (8.56% / 12) * $1,000 = $7.13
- DOGE: New APR: 4.18% Monthly return: (4.18% / 12) * $1,000 = $3.48
- XRP: New APR: 1.96% Monthly return: (1.96% / 12) * $1,000 = $1.63
Total monthly return across all investments:
$42.14 + $24.87 + $31.93 + $15.18 + $16.58 + $8.97 + $15.76 + $7.13 + $3.48 + $1.63 = $167.67
Therefore, if you invest $1,000 in each of these cryptocurrencies (total investment of $10,000), your estimated monthly return would be $167.67, based on the new APRs after your investment.
Remember that this is a theoretical calculation assuming stable prices and APRs.
In reality, cryptocurrency markets are highly volatile, and staking rewards can change frequently.
Additionally, there may be lock-up periods, unstaking fees, and other factors to consider when staking cryptocurrencies.
The Reality Check
While $167.67 per month from staking rewards could supplement a retirement income, it falls short of covering full living expenses in Vietnam.
Here are some important considerations:
- Volatility: Cryptocurrency markets are highly volatile. The value of your initial investment and the staking rewards can fluctuate dramatically.
- Declining Returns: As more people stake, rewards typically decrease. The high APRs we see today may not be sustainable long-term.
- Regulatory Risks: Cryptocurrency regulations are still evolving in Vietnam and globally, which could impact staking opportunities.
- Diversification: Relying solely on cryptocurrency staking for retirement income is extremely risky. A diversified portfolio is crucial for long-term financial security.
- Additional Income Needed: To retire comfortably in Vietnam, you would need additional sources of income or a larger initial investment.
Further disclaimer
We remain of the opinion that the best place for your coins is in your own wallet, secured by dedicated hardware with a proper backup procedure.
Staking cryptocurrencies is necessarily a custodial undertaking, and you must trust the platform/provider (in this case – us), not to get hacked or run away with your money.
While our track record might offer some reassurance regarding the latter, the fact remains that you introduce counterparty risk by entrusting a third party with safeguarding your money.
If you are looking for a multi-coin hardware wallet, BitcoinVN is the official reseller and importer for both leading hardware wallet manufacturers, Trezor and Ledger.
All current models of Trezor and Ledger are available for direct shipping from our Vietnam warehouse (no customs hassle involved for you!).
For those seeking further professional advice on handling your custody, our in-house team of seasoned experts is available for consultations.
And if you want to plan your Bitcoin savings strategy for the long term, you might want to consider exploring Multivendor Multisig – the currently best-known method to eliminate multiple crucial single points of failure.
Conclusion
While BitcoinVN’s staking vault offers an attractive opportunity to earn passive income, it shouldn’t be viewed as a standalone retirement strategy.
Instead, consider it at most as one component of a broader, diversified investment portfolio.
Combining staking rewards with other investments, savings, and possibly part-time work could make retiring in Vietnam more feasible.
Retirement planning is complex and highly personal, and the majority of your savings should be invested very conservatively to cover a broad range of adversarial scenarios.
Hence, nothing you have read here should be taken as actionable financial advice.
